Rail Coupler Importer Asks for Remand, Cites New Evidence of Domestic Industry Fraud
Rail coupler importer Strato Feb. 1 filed a motion for remand for reconsideration of an injury investigation, alleging “newly emerged evidence of fraud perpetuated by the domestic industry” (Wabtec Corp. v. U.S., CIT Consol. # 23-00157).
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Specifically, it said that the investigation’s petitioners had been selling couplers that “deviated significantly from the specifications approved by the Association of American Railroads.”
Strato, along with its exporter, Wabtec, has been asking the Court of International Trade to have the International Trade Commission reconsider the affirmative injury determination the ITC reached regarding Strato’s imported rail couplers -- only a couple of months after having reached a negative determination for the same products (see 2408200046). The two companies, along with another, Amsted Rail Co., have already claimed a conflict of interest occurred when the investigation’s petitioner took onboard counsel that had previously worked for Amsted (see 2403250051).
In the Feb. 1 filing, Strato said the Association of American Railroads undertook an investigation into domestic producers in “late 2023.” It “took prompt action,” announcing that a recent knuckle model being produced and sold by the investigated companies hadn’t undergone the association's approval process.
This unapproved knuckles “cause premature failures in other [freight rail coupler] components,” it said.
Knuckles are supposed to act as the “fuse” of a rail coupler, breaking harmlessly when the entire system is put under more stress than it can bear, the importer said, as broken knuckles can be more easily replaced on the road. But these knuckles “shifted the loading of stress from the knuckle to the coupler body.”
“Notably, they have caused considerable damage to coupler bodies with which they were sold as a fit or paired as a replacement knuckle,” Strato said. “Studies show that the pulling lugs on a coupler body used with non-AAR-approved knuckles appear to wear three times as fast.”
Those knuckles were made using a new patented design that was “concealed” from both the association and purchasers, as the domestic industry “continued to market its new knuckles as AAR-approved” and used the same catalogue code from them, Strato said.
“The domestic industry withheld material information about these design changes both from the AAR and from the Commission, and repeatedly certified to the Commission that their knuckles enjoyed AAR approval,” Strato said.
This wasn’t just a series of “minor changes to the knuckles” but “a whole new product,” the importer said. For example, the new design “significantly altered the angle of the top and bottom knuckle pulling lugs, i.e., the rectangular blocks located on the tail of a knuckle,” it said.
As a result of the domestic industry’s fraud, the ITC determined that those domestically produced knuckles were interchangeable with the imports it was investigating, the importer said.
It claimed that the fraud “tainted” the ITC’s investigation, including its analyses “of domestic like product, cumulation, conditions of competition, and price effects, and undermined all data collected on price, capacity, production, shipments, and inventory” during the period of investigation.
It noted that Wabtec had approved of the Feb. 1 brief, and that the government was not taking a position “until it has the chance to review the motion and attached documentation more closely.” The defendant-intervenor, Coalition of Freight Coupler Producers, also seeks to file in opposition, Strato said -- “a request that Strato does not oppose.”